Final Results

NewMedia SPARK PLC
14 June 2002

Embargoed until 0700, 14th June 2002




                               NewMedia SPARK plc

  Preliminary Announcement of Annual Results for the year ended 31 March 2002

NewMedia SPARK plc today announces preliminary results for the year ended 31
March 2002.

Business and financial highlights:

  • SPARK's net assets as at 31 March 2002 were £61.6m (2001, £207.7m)
    representing 13.0p per share (2001, 41.7p). 26.4m shares were cancelled in
    the period reducing issued share capital to 472.0m shares (2001, 498.4m).

  • The Group has accounted for further substantial portfolio write-downs. 40
    companies out of a portfolio of 68 companies continue to be ascribed a total
    value of £38.8m (2001: £109.7m for 56 companies). The two largest
    investments are now SPARK's 11.36% holding in Tullett & Tokyo Liberty plc
    (book value £7.3m) and its 38.46% holding in Synaptics Ltd (book value
    £2.9m).

  • Cash balances have been rising since 30 September 2001 (at which time
    SPARK reported balances of £35.0m) due to portfolio realisations and tight
    control over new expenditure levels. As at 31 March 2002, the Group had cash
    balances of £41.8 (2001, £76.6m), plus restricted cash balances of £5.5m
    (2001, £3.4m).

  • A number of SPARK's portfolio companies continue to make good progress.
    Fourteen portfolio companies attracted independent third party investment in
    the year and six portfolio companies were sold.

  • The Group continues to focus on controlling expenditure and is in the
    process of reducing staff by over 50% to approximately 16 employees. The
    remaining senior executives are accepting an aggregate 30% salary reduction.

  • SPARK's Board is considering its strategic and financial options to
    maximise shareholder value, including returning surplus cash to
    shareholders. Court permission is to be sought for SPARK to buy its own
    shares, either in the market or via tender offer.

Commenting on the results, Mike Whitaker, CEO of SPARK, said:

'It is clear that in present market conditions SPARK must adjust its course and
that radical action is required to maximise shareholder value. We are therefore
instituting further very substantial cost cuts, closely controlling new
expenditure and exploring ways of returning surplus cash to shareholders.
SPARK's Board is also considering other strategic and financial options'.

For further information:

NewMedia SPARK plc     020 7851 7777

Mike Whitaker, Chief Executive Officer

Bruno Delacave, Chief Financial Officer


Chief Executive Officer's report

SPARK's results for the year ended 31 March 2002 are once again disappointing.
In the light of continuing weakness in technology and IPO markets, SPARK's Board
has decided to implement further very substantial write-downs to the book value
of SPARK's investment portfolio. Following these write-downs, SPARK's stated net
asset value is 13.0p per share.

However SPARK's balance sheet remains strong. Due to portfolio realisations and
close control over new investment levels, consolidated cash balances have
increased from £35.0m as at 30 September 2001 to £41.8m as at 31 March 2002. A
proportion of these cash balances is held within SPARK's German subsidiary,
Spuetz AG. SPARK (following further acquisitions of minority stakes since the
year end) presently owns 62.26% of Spuetz AG and is in the process of making an
offer to acquire the minority shares it does not yet own. If successful, this
offer will involve a maximum cash outlay by SPARK of £6.3m.

Excluding cash, SPARK's investment portfolio now has a book value of £38.8m.
During the period under review SPARK has written down to zero the book value of
its holding in eTV, which was previously its largest single investment. This
reflects the difficult state of the Digital TV industry and SPARK's decision to
cease further funding of eTV. Similarly, the value of SPARK's holding in EO plc
has been written down to £1.6m (approximately the level of attributable cash in
EO's balance sheet) and the value of SPARK's majority holding in DX3 has been
written down to £1.6m. SPARK is hopeful that following these and other sharp
write downs the present carrying value of its portfolio will in due course prove
to be conservative.

Overall, SPARK has taken a harsh view in its latest portfolio valuations, but
nevertheless continues to ascribe value to 40 companies within its investment
portfolio (albeit at sharply reduced valuations in many cases). The two largest
investments are now SPARK's 11.36% holding in Tullett & Tokyo Liberty plc (book
value £7.3m) and its 38.46% holding in Synaptics Ltd (book value £2.9m). Both of
these companies are profitable, with Tullett & Tokyo Liberty plc having reported
a pre-tax profit of £26m for 2001. Notwithstanding extremely difficult market
conditions, SPARK believes that it retains a number of other investments with
good potential for strong longer-term investment returns: several (e.g. 4th
Contact, ADVFN, Footfall, and Pricerunner) are growing businesses which are
category leaders in their areas of activity and which are either approaching or
have already achieved operational cash flow break-even; others (e.g. Berkeley
Berry Birch and Digital Animations) are quoted; and some (e.g. Aspex, OneEighty
Software) are still at an early stage of development but have strong technology
that is achieving growing market acceptance.

It is also worth noting that despite extremely difficult market conditions,
fourteen of SPARK's investee companies which account for about one third of
SPARK's year end portfolio value have received further investment from external
third parties during the last twelve months.

Nevertheless, SPARK's Board has noted that its share price has recently been
trading at levels which implicitly value SPARK primarily in relation to its cash
reserves, and which places little or no value on its investment portfolio. In
these circumstances, and in the light of continued weakness in technology and
IPO markets, it is clear that to maximise shareholder value SPARK must adjust
its course and that radical action is required. SPARK is therefore in the
process of instituting the following actions:

  • Further substantial reductions in central costs are being implemented. We
    are reducing staff levels by over 50% to approximately 16 employees and are
    seeking substantial reductions in office and other central overhead costs.
    Remaining senior staff (including executive Directors) have agreed to take
    salary cuts of up to 30% and I will continue to draw no salary. The effect
    of this re-organisation process, once complete, will be to reduce costs to
    approximately £2m per annum.

  • In the light of the above re-focused objectives and reductions in senior
    staff salary levels, SPARK's non-executive Directors have reviewed the
    executive carried interest scheme. In future, half of the scheme will be
    based on the achievement of increases in aggregate cash levels attributable
    to shareholders with the other half remaining dependent on achieving
    realised increases in aggregate portfolio valuations. This is intended to
    motivate the reduced team to work aggressively towards achieving increases
    in cash and also to achieve portfolio realisations above book value.

  • The Board is considering ways in which in due course surplus cash could be
    returned to shareholders whether by giving the Company the ability to
    purchase its own shares or otherwise. SPARK's Board is also considering
    other strategic and financial options with a view to maximising shareholder
    value.

SPARK's results for the year ended 31 March 2002 are of course disappointing.
But it is clear that, as an early stage Technology, Media and Telecoms (TMT)
venture capital organisation, SPARK has been operating in extraordinarily
difficult market conditions for some two years now. Far from showing signs of
improvement, trading conditions and confidence in a wide range of technology
sectors have continued to deteriorate in recent months with an unprecedented
number of high profile corporate casualties. Marconi, Energis, KPNQwest, ITV
Digital, Kirch Gruppe, Worldcom and many others have suffered catastrophic
collapses in shareholder value. These collapses have further eroded investor
confidence and activity levels in the sector.

Such adverse market conditions have made life extraordinarily difficult for
venture capital organisations and especially for those who, like SPARK, not only
invest in early stage TMT but are also themselves quoted. The performance of
SPARK's investment portfolio has been poor during the past two years, but
arguably no more so than most other organisations investing in the sector. SPARK
has responded to adverse market conditions by making several corporate
acquisitions (e.g. Internet Indirect plc, Spuetz AG) which have been successful
and which have enabled SPARK to retain a strong balance sheet. Nevertheless, it
is clear that in present adverse market conditions SPARK's basic business model
of early stage venture capital investment in the TMT sector is not particularly
well suited to a public quotation. The fact is that SPARK's investors do not
currently wish to see SPARK utilising its cash resources to make further
investments in the sector, despite low valuations, and as a public company SPARK
must take account of, and respond to, this sentiment.

SPARK has therefore decided that, for the time being, it will take the route of
closely controlling expenditure, exploring ways of returning surplus cash to
shareholders, whilst preserving the underlying longer term potential within the
investment portfolio. SPARK will continue to monitor market conditions and
investor sentiment closely over the coming months, and will give consideration
to any corporate action which it believes to be in the interests of its
shareholders.

Michael Whitaker

13 June 2002




Consolidated Statement of Total Recognised Gains and Losses

year ended 31 March 2002
                                                                                  Year ended                 Year ended

                                                                               31 March 2002              31 March 2001
                                                                                       £'000                      £'000
                                                                                   Unaudited                    Audited

Loss for the year                                                                  (104,248)                   (46,004)
Unrealised loss on investments                                                      (48,570)                   (32,873)
Previously unrealised losses now deemed permanent                                     10,036                          -
Deemed remuneration on transfer of founder warrants                                      119                          -
Minority interest share of revaluations                                                    -                      6,007
Exchange differences                                                                   (457)                    (7,444)

Total recognised gains and losses relating to the period                           (143,120)                   (80,314)





Reconciliation of Movements in Consolidated Shareholders' Funds

year ended 31 March 2002
                                                                                 Year ended                  Year ended

                                                                              31 March 2002               31 March 2001
                                                                                      £'000                       £'000
                                                                                  Unaudited                     Audited

Loss for the year                                                                 (104,248)                    (46,004)
Other recognised losses for the year                                               (38,872)                    (34,310)
Cancellation of shares                                                              (2,987)                           -
Proceeds of issue of shares                                                               4                     106,195
Deemed proceeds from issue of warrants                                                    -                       8,391
Net (reduction)/addition to shareholders' funds                                   (146,103)                      34,272
Opening shareholders' funds                                                         207,684                     173,412
Closing shareholders' funds                                                          61,581                     207,684



Consolidated Profit & Loss Account

year ended 31 March 2002
                                                                                 Year ended                  Year ended

                                                                              31 March 2002               31 March 2001
                                                                                      £'000                       £'000
                                                                                  Unaudited                     Audited

Turnover                                                                              3,008                           -

Administrative expenses:
- Salaries and other staff costs                                                      8,537                       2,941
- Administrative and operating costs                                                  6,995                       3,281
- Amortisation of positive goodwill                                                  15,661                       2,214
- Amortisation of negative goodwill                                                (10,007)                        (56)
- Depreciation                                                                          967                          91
- Other costs                                                                         3,551                         846
Total administrative expenses                                                        25,704                       9,317

Other operating income                                                                1,143                         857

Operating loss                                                                     (21,553)                     (8,460)

Loss on investments                                                                (85,859)                    (40,851)
Interest receivable and similar income                                                2,408                       3,059

Loss on ordinary activities before taxation                                       (105,004)                    (46,252)

Tax on loss on ordinary activities                                                  (1,090)                        (15)

Loss on ordinary activities after taxation                                        (106,094)                    (46,267)

Equity minority interests                                                             1,846                         263

Retained loss for the year                                                        (104,248)                    (46,004)

Loss per ordinary share                                                            (22.32p)                    (13.48p)
Diluted loss per ordinary share                                                    (22.32p)                    (13.48p)



In the year ended 31 March 2002, acquired businesses contributed £5.512m of
operating profit to the Group results.



Consolidated Balance Sheet

as at 31 March 2002
                                                                                       2002                        2001
                                                                                      £'000                       £'000
                                                                                  Unaudited                     Audited
Fixed Assets
Intangible assets
- Positive goodwill                                                                   1,338                      16,999
- Negative goodwill                                                                 (4,044)                       (718)
Tangible fixed assets                                                                 2,442                       1,440
Investments                                                                          38,816                     109,731
                                                                                     38,552                     127,452
Current Assets
Debtors                                                                               8,696                       5,349
Current asset investments                                                               988                           -
Cash at bank and in hand                                                             41,782                      76,568
                                                                                     51,466                      81,917

Creditors: amounts falling due within one year                                     (10,160)                     (1,541)

Net current assets                                                                   41,306                      80,376

Total assets less current liabilities                                                79,858                     207,828

Provisions for liabilities and charges                                              (3,684)                           -

Equity minority interest                                                           (14,593)                       (144)

Net Assets                                                                           61,581                     207,684

Capital and reserves
Called up share capital                                                              11,799                      12,459
Share premium account                                                               183,365                     247,113
Revaluation reserve                                                                (47,336)                     (8,802)
Capital reserve                                                                       8,391                       8,391
Profit and loss account                                                            (94,638)                    (51,477)
Equity shareholders' funds                                                           61,581                     207,684



Consolidated Cash Flow Statement

year ended 31 March 2002
                                                                                 Year ended                  Year ended

                                                                              31 March 2002               31 March 2001
                                                                                      £'000                       £'000
                                                                                  Unaudited                     Audited

Net cash outflow from operating activities                                          (9,369)                    (13,379)

Returns on investments and servicing of finance
Interest received                                                                     2,408                       3,059
Net cash inflow from returns on investments and servicing of finance                  2,408                       3,059

Taxation
UK Corporation Tax Paid                                                                (93)                       (982)
Overseas Tax Paid                                                                         -                        (27)
Net cash outflow from taxation                                                         (93)                     (1,009)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                                             (905)                       (945)
Payments to acquire investments                                                    (27,688)                    (30,964)
Receipts from sales of investments                                                   27,723                         467
Net cash outflow from investing activities                                            (870)                    (31,442)

Acquisitions and disposals
Purchase of subsidiary undertakings                                                (28,412)                    (10,465)
Purchase of minority interest                                                             -                     (3,446)
Net cash acquired with subsidiaries                                                   1,550                      99,719
Net cash (outflow)/inflow from acquisitions and disposals                          (26,862)                      85,808

(Decrease)/increase in cash in the year                                            (34,786)                      43,037



Note


The financial information set out in the announcement does not constitute the
company's statutory accounts for the years ended 31 March 2002 and 2001. The
financial information for the year ended 31 March 2001 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under s237(2) or (3) Companies Act 1985. The
statutory accounts for the year ended 31 March 2002 will be finalised on the
basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the company's annual general meeting.






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